* Spot gold headed for weekly gain of 0.8%
* Silver up 2.5% for the week
* Dollar index down for second straight week
* Interactive graphic tracking global spread of coronavirus: https://graphics.reuters.com/world-coronavirus-tracker-and-maps/ (Updates prices)
By Eileen Soreng
Oct 9 (Reuters) - Gold prices rose over 1% on Friday and were headed for a second straight weekly gain due to a weaker dollar, with renewed optimism over a new U.S. coronavirus relief package bolstering the metal's appeal as an inflation hedge.
Spot gold XAU= climbed 1.1% to $1,914.06 per ounce by 0808 GMT and was up 0.8% for the week.
U.S. gold futures GCv1 were up 1.2% at $1,917.80.
The dollar index .DXY dropped against rivals and was on track to fall for a second straight week. USD/
"With renewed hopes for another fiscal stimulus, we saw the dollar decline, inflation expectations pick up and risk returning to the table. All these factors are pushing gold higher," said Howie Lee, an economist at OCBC Bank.
Talks resumed between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over the coronavirus aid plan. widening lead for Democratic presidential candidate Joe Biden was also seen as opening the way for a big economic stimulus.
Gold, considered a hedge against inflation and currency debasement, has gained nearly 26% this year, boosted by unprecedented stimulus globally to cushion the pandemic's economic impact.
"Should spot gold be able to notch a higher high past the $1,920 resistance level, that should confirm its recent uptrend over the past fortnight and assure its grip on the $1,900 handle for the near future, provided dollar doesn't throw a wrench into the works," said FXTM market analyst Han Tan.
Mirroring the metal's appeal, gold-backed exchange traded funds added more than 1,000 tonnes of bullion worth $60 billion to their stockpile in the first nine months of 2020, the World Gold Council said on Thursday. XAG= rose 2.1% to $24.32 per ounce and was up 2.5% for the week. Platinum XPT= gained 2.2% to $880.96 and palladium XPD= was 1.3% higher at $2,403.21.